Social network giant Facebook has acquired photo-sharing service Instagram for $1 billion in cash and stocks. According to reports, that is the largest acquisition from Facebook.

Statement from Facebook creator and CEO Mark Zuckerberg says, "This is an important milestone for Facebook, because it's the first time we've ever acquired a product and company with so many users."

Instagram's 27-year old founder and CEO Kevin Systrom was rumored to receive $400 million from the acquisition while staff received an estimated $100 million.

Principal Analyst at Moor Insights & Strategy, Patrick Moorhead says the move of Facebook was defensive as Instagram is one of their biggest competitor when it comes to photo sharing service. He added, "Facebook will never make that $1 billion back, but it's still smart. Instagram was the only thing challenging (Facebook's) dominance in photo sharing."

Instagram recently released an Android version of their application and had received a million download on the release.